Move over, Bezos: New 'world's richest person' revealed

The 'no salary, no bonuses' strategy has paid off big time for this billionaire

Move over, Bezos: New 'world's richest person' revealed

Amazon founder and CEO Jeff Bezos built his fortune on the back of his phenomenal online retail platform. Like a true American capitalist, Bezos knows his success has been a steady climb to the top.

It’s a different story, however, for the man who surpassed him as the richest person on the planet.

Tesla CEO Elon Musk, who has overtaken Bezos as the world’s wealthiest man, has a unique executive pay strategy that ties his remuneration solely to the performance of his electric car company.

From 2018, the CEO won’t be receiving any “guaranteed” compensation for a decade – “no salary, no cash bonuses, and no equity that vests by the passage of time,” Tesla said in a note to investors.

“Instead, Elon’s only compensation will be a 100% at-risk performance award, which ensures that he will be compensated only if Tesla and all of our stockholders do extraordinarily well,” the company said.

Read more: Tesla's leaked handbook sheds light on open-door policy

His so-called CEO Performance Award consists of stock options that vest “only if Tesla achieves specific milestones,” which should include a market capitalisation milestone and an operational milestone.

For Musk to receive the first tranche, Tesla needed to hit a $100bn market cap while achieving an additional operational goal. All succeeding tranches will only be paid out each time Tesla increases its market cap by another $50bn.

Tesla said the goal was to become “one of the most valuable companies in the world with a market capitalisation of at least $650bn”.

The CEO pay package is an all-or-nothing move for Musk – and proves he’s in it for the long haul. With Tesla now achieving a market valuation of $773bn, the strategy appears to have finally paid off.

Read more: Should bosses have to pay back their bonuses?

Musk is now worth US$188.5bn, with his value buoyed by the five per cent increase in Tesla’s stock price, according to data from Bloomberg.

Bezos trails behind with a net worth of $187bn. Meanwhile, fellow tech magnate Bill Gates is a distant third with a value of $132bn.

In the old Billionaires’ Club, the gap between Musk and Bezos’ net worth might not seem a lot for two industry leaders who have gone head to head for years.

But for the rest of humanity, that’s still more than a BILLION dollar difference. It’s enough to yield an ROI of $7bn to $14bn if invested in youth education programs designed for future-proofing skills – the same skills that companies like Tesla and Amazon look for in their workers.

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